Edward E. and Constance M. Thorpe - Page 20

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          T.C. 1207 (1948); Eagleton v. Commissioner, 35 B.T.A. 551 (1937),           
          affd. 97 F.2d 62 (8th Cir. 1938).                                           
               The record shows that on March 8, 1991, ETCO remitted a                
          check in the amount of $22,000 to TransAmerica via Mr. Sloan.               
          TransAmerica never presented the check to ETCO's bank for                   
          payment.  A second check for the same amount dated January 29,              
          1992, was made and remitted to TransAmerica to replace the lost             
          check dated March 8, 1991.  The check dated January 29, 1992, was           
          ultimately returned to ETCO.  Because neither of ETCO's checks              
          made payable to TransAmerica was presented and honored in due               
          course, it does not constitute payment, which would relate back             
          to an earlier date of the delivery of either check to                       
          TransAmerica.  Because none of the $22,000 checks made payable to           
          TransAmerica were presented for payment, we find that no payment            
          occurred, and ETCO is not entitled to a deduction in fiscal years           
          ending June 30, 1990 or 1991 under the cash basis method of                 
          Premiums for Life and Disability Insurance Policies                         

               Respondent argues that ETCO is not entitled to the expense             
          deductions for life and disability insurance premiums in the                
          amounts of $6,345, $5,490, and $3,690 for the fiscal years ended            
          June 30, 1990, 1991, and 1992, respectively.  Respondent contends           
          that ETCO was the owner and beneficiary of such policies.  ETCO             
          contends that it is entitled to deduct the premiums paid during             

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